Too much reorganisation can cause a talent crisis

Employers’ preoccupation with structural reorganisation could lead to a management and talent crisis, according to research.

A survey by the Corporate Executive Board of 18,000 employees working in European firms found that companies were focused on staff changes and structural reorganisation in a bid to improve performance, but this was undermining investment in developing leadership talent and retaining high performers.

The Executive Guidance for 2010 report revealed that only one in six (16%) surveyed organisations which made at least one senior level personnel change had succeeded in outperforming their key performance objectives during 2009.

In contrast, 39% of leaders in firms that had resisted leadership team change had succeeded in outperforming their objectives in the same period.

The study also revealed that high performing employees were unsettled and were 10% more likely to leave their organisations today than a year ago. One in four indicated that they plan to leave in the next 12 months.

Meanwhile, the survey found that training and succession plans had not delivered – almost four out of five (84%) of identified successors were not ready to step into the executive role they had been nominated for.

Christoffer Ellehuus, Corporate Executive Board’s managing director of Europe, Middle East and Asia, Corporate Leadership Council, said: “European companies are rightly reappraising their readiness for outstanding future performance as the global economy exits recession, but the collective focus needs to be on ensuring that the impact of structural changes upon the ability of individuals to do their jobs effectively is factored into the planning process.”